CORPORATE SOCIAL RESPONSIBILITY

Our actions as a company are not measured solely against economic benchmarks. We also take ecological and social interests into account. That means that we take a responsible approach to natural resources and the environment, take care of our employees and fulfil our social responsibilities.

In particular we aim to meet the requirements of sustainable development for the sake of future generations. Our company committed itself to that objective when it signed the UN Global Compact in 2010. This compact between the United Nations, companies and organisations aims to bring about a higher level of social and economic justice. There are also many KSB customers among its 10,000 signatories.

OBSERVING STANDARDS

We not only wish to achieve the improvements defined in the UN Global Compact with respect to labour standards, environmental protection, business conduct and observance of human rights within our own company, we also require these of our suppliers. In 2012 we surveyed KSB Aktiengesellschaft’s key suppliers on these issues. In the year under review we expanded the survey and enquired at global level about the extent to which our business partners share our commitment to the social, ecological and economic values defined by the United Nations. To date, our ongoing survey has reached more than 50 % of our supplier chain.

We are committed to observing legal and ethical standards. By doing so, we preserve KSB’s good reputation, which bolsters the confidence of customers and business partners. To avoid the possibility of any misconduct, we have acquainted more than 4,000 employees with compliance topics such as corruption prevention and cartel / antitrust law. Such training was, of course, of particular relevance to employees in sales and purchasing, who need to react with great sensitivity to any deviations from standards.

Even if all reasonable precautions are taken, infringements of applicable law or internal rules of conduct can occur. In such cases, employees can inform their line managers or the Group Compliance Officer. In addition, there is an independent ombudsman whom they can contact in confidence. Since 2013, this impartial arbitrator has also functioned as a contact for any instances of human rights infringements such as discrimination.

PROMOTING HEALTH

Staff absences reduce a company’s productivity and competitiveness. For this reason, our commitment to the health of our employees extends the legal occupational health requirements. In Germany, for example, this takes the form of occupational health management under medical supervision. A holistic approach allows physical and psychological stresses to be identified and contained in good time.

Our approach focuses on employees making their own decisions regarding their health. To this end we offer options ranging from vaccinations and other preventative measures to PC-based exercise programmes and corporate sports events.

PROTECTING NATURAL RESOURCES

Companies face complex requirements when it comes to environmental protection, quality and occupational health that require globally coordinated activities. These are handled by specialist staff members as part of an Integrated Management System. These same staff members are also responsible for obtaining international standards certifications. Of our 36 production plants, 32 currently possess such certifications. Our Australian plant in Tottenham was added to the list in 2013 and we also had sales and service offices in Australia, Germany, the Czech Republic and Hungary certified in the year under review.

We are reducing our consumption of energy and raw materials as much as possible by means of efficient production processes. At some of our sites we are generating environmentally friendly electricity for our own use. In Nashik, India, wind, sun and biogas contribute towards the plant’s energy requirements. We are also conscious of the origins of electrical energy in some of our smaller locations without production facilities. Since 2013 our British company has being using “green electricity” whose generation causes 10 % fewer emissions.

In Jundiaí, Brazil, we inaugurated a plant that serves as a showpiece from an ecological perspective. All of the plant’s facilities meet the latest energy consumption and environmental protection standards. The construction of the production facility allows it to operate using only natural light; no artificial lighting at all is required during daytime. Hot water is obtained using solar energy and there is a system in place to collect rainwater for use in industrial processes, sanitary facilities and, in the event of emergencies, fire protection. In India we expanded an existing rainwater harvesting system in 2013.

EXPLOITING GREEN POTENTIAL

Our employees’ environmentally aware behaviour saves energy. We encourage our staff to come up with ideas to protect valuable resources. In 2013 we received suggestions for improvements from employees in Australia, Germany, Switzerland, Turkey and the United States. These resulted in numerous individual measures, such as the introduction of lights with movement sensors that avoid unnecessary lighting.

A global company requires people to cooperate across great distances, which creates a need for meetings. To reduce travel costs and environmental emissions, we use an international video network for such direct communications. In 2013 we set up eight new video-conferencing rooms and we now have 54 such facilities in 17 countries. More than 10,000 video conferences were held in the past year to discuss and resolve cross-location matters. We will continue to expand the video network.

When companies engage in manufacturing, waste is an inevitable by-product. We try to employ recyclable materials wherever possible. If such materials are to be reused, they must first be separated, which is why, from 2013, we have obliged all our service locations to separate their waste, even where local legislation does not require this. In China we changed our packaging to minimise the use of materials that cannot be recycled.

KSB is testing environmentally friendly electric vehicles with a range of 100 km in two of its German plants.

EFFICIENT PRODUCTS SAVE ENERGY

The distinguishing feature of environmentally friendly technical products is that their use requires little electricity. Manufacturing and providing energy-efficient products is in line with our customers’ growing interest in such equipment. KSB was quick to adapt to this development and offers a comprehensive concept to utilise savings potentials.

The idea: KSB optimises not just individual components, such as pumps and drives; we take entire hydraulic systems into consideration. To achieve this, system specialists pay visits to pump system operators and perform a comprehensive analysis. Where necessary, they recommend technical adjustments and harmonise plant components to make the system work efficiently. In many cases this can result in energy savings of up to 60 %. The demand for this service offer rose by about 10 % in the year under review. We therefore increased our advertising of the service in 2013 to attract even more customers.

In 2012 and 2013 our designers completely redesigned several standardised chemical and water pumps, with a major focus on improved energy efficiency.

In the year under review we launched a highly efficient circulator pump on the market that meets the European Union’s 2015 efficiency requirements. In Europe alone, there are 140 million circulator pumps that run at fixed speed and are often the largest electricity consumer in a home. Energy consumption and emissions can be reduced by exchanging old units for high-efficiency pumps. The European Commission estimates there to be a savings potential of 23 terawatt hours by 2020, which is equivalent to Ireland’s annual electricity consumption and would lower CO2 emissions by around 11 tonnes.

SUPPORTING EDUCATION

Social responsibility is an integral part of our corporate identity. Three of four KSB companies currently play an active role in the social, ecological and economic development in the vicinity of their locations. We are involved in initiatives and institutions to help people in many locations. A focus of our social activities is education. Not least because of demographic developments in some Western countries, the number of skilled personnel is set to fall, so education is, in our opinion, an important topic for the future. As a founding member of the “Wissensfabrik – Unternehmen für Deutschland e.V.” [Knowledge Factory – Companies for Germany], we help kindergartens and schools awaken young people’s interest in science and technology at an early stage. KSB provides learning materials for experiments and practical exercises and trains teachers and educators to use them correctly. Another element of our involvement in the Knowledge Factory is a storytelling project for speech development in early childhood.

In 2013 we played host for the first time in the regional round of the largest European youth competition in the field of sciences and technology. The 93 participants in “Jugend forscht – Schüler experimentieren” (Youth Researches – Pupils Experiment) presented their projects, which addressed a variety of topics.

It is not always easy for young people to master the transition from school to the world of work. In Germany we are members of a network in which schools and business regularly exchange views. The aim is for young people to realise via concrete projects that different aspects of the academic knowledge they acquire at school can be a requirement for some careers. We are playing an active part in persuading other companies and organisations to join the initiative.

We also support a programme in Brazil that prepares young people for the job market. See our report on page 62.

Imbued with the spirit of discovery: KSB for the first time organised the regional round of “Jugend forscht – Schüler experimentieren” (Youth Researches – Pupils Experiment).

GLOBAL COMMITMENT

We are engaged in various social projects in Asia via our KSB CARE aid fund, where the focus of our involvement in 2013 was again on educational projects. For example, we equipped schools and needy pupils in India and Indonesia with learning materials and equipment.

The KSB companies in South Korea and Taiwan assisted the victims of the devastating typhoon in the Philippines.

Our US employees are traditionally strongly involved in charitable work. For example, they actively support local charitable institutions that take care of needy children and their families. The staff regularly give blood for the US Red Cross.

In addition, KSB offers financial assistance worldwide. KSB Aktiengesellschaft alone donated around € 170,000 and made contributions in kind to various organisations and social projects in 2013.